Papa John’s founder John Schnatter has resigned as chairman of the board after admitting and apologizing for using the N-word during a May conference call.
Shares of the pizza chain surged 11 percent Thursday morning — recovering all of the $96.2 million, and then some, in market value the company lost after Schnatter’s comments were reported by Forbes the day before.
The conference call in May came to light after Forbes magazine detailed the incident in an article Wednesday. The report, which was later confirmed by Schnatter, said he was on a call with marketing agency Laundry Service when he tried to downplay comments he made about the National Football League last fall by saying, “Colonel Sanders called blacks n—–s” and never faced any public backlash at KFC.
According to Forbes, Schnatter added that people used to drag African-Americans from trucks until they died. Although his comment was apparently intended to convey his distaste for racism, Forbes said multiple people on the call were offended. The call was part of media training for Schnatter to prevent future public relations fumbles.
While Schnatter is no longer the CEO or chairman of Papa John’s, he is still tied with the brand’s image and is featured prominently on the company’s pizza boxes. Schnatter, who owns a 24 percent stake in the company, also remains on the company’s board.
“I think the big thing for them going forward is how do they distance themselves entirely from John?” Hill said.
Papa John’s fell by as much as 5.9 percent Wednesday to a 12-month low before rebounding Thursday. The company’s stock was down nearly 14 percent year to date before Schnatter’s resignation but has recouped much of those losses. Domino’s shares have gained 47 percent so far this year.